NEW DELHI: The digital classifieds industry in the country is projected to expand 3-fold to $1.2 billion by 2020, driven by rapid growth of e-services, real estate and automobiles, a Google-KPMG report said today.

"The ecosystem is ripe for the emergence of digital classifieds. Spurred by the smartphone penetration, online users are expected to grow to a whopping 650 million by 2020; and with every second consumer willing to pay for value added services, the digital classified segment is expected to touch $1.2 billion by 2020," Google India Industry Director Nitin Bawankule said.

Platforms catering to multiple categories would continue to lead with about 30 per cent market share of total digital classifieds in 2020 at about $346 million.

Google search trends reveal that local searches across these categories have grown by 4X in the last four years, led by non-metros like Pune, Ahmedabad, Chandigarh, Kochi, Coimbatore, Indore and Jaipur.

Real Estate and e-services are expected to increase 4-fold and 7-fold respectively by 2020.

Within e-services classifieds, verticals like auto rentals, relocation services and home services like beauty services, repair and tutoring are the most popular segments.

Online jobs market is set to double by 2020 with 63 per cent consumers accessing e-classified. Bengaluru, Mumbai, NCR and Hyderabad are the top ranked cities for online job searches and 'Sarkari Naukri' is one of the top searched Indic terms.

The report also found that the digitally savvy consumer is happy to pay for value added services. For instance, 59 per cent of used goods buyers surveyed said they are willing to pay for quality verification of goods or home delivery.

Similarly, 43 per cent of job portal users said they are willing to pay for auto application for jobs and 40 per cent of those searching for real estate options said they would invest more for legal verification and property check.

KPMG India Partner E-Commerce and Start Ups Sreedhar Prasad said unverified listings and low customer loyalty are some of the challenges seen even as the digital classified segment undergoes a rapid transformation.

"However, it is expected that there will be convergence of online businesses since the end customer is the same, thus a high possibility of e-Tailing, EServices and Digital classifieds coming together as a strong one stop value proposition in the coming years," he added.

This would further enhance revenue streams, monetising possibilities and reduce overall cost of customer acquisition, he said.